📆 Thursday, March 27
► European equities fell sharply on Thursday (but already during the after-hours session on Wednesday) after U.S. President Donald Trump announced a 25% tariff on all foreign-made car imports, escalating concerns of worsening trade relations. The Stoxx 600 dropped 0.5%, led by steep losses in automakers and industrials. Germany’s DAX lost 0.65%, with Volkswagen, BMW, Porsche, Continental (=stocks connected to the auto industry – which are key for the Germany economy) all falling more than 3%. France’s CAC 40 slipped “only” 0.3%, while the UK’s FTSE 100 declined 0.6%. The SXAP auto sector index slid over 2.6%, erasing its year-to-date gains. EU officials prepared retaliatory tariffs and considered activating the anti-coercion instrument in response, while Germany and Canada vowed countermeasures — further weighing on risk sentiment. However, most of the losses happened already yesterday or in yesterday's European after-hours session.
► U.S. stock futures traded mixed after a volatile week (so far), as investors weighed trade risks and awaited fresh inflation data. In pre-market trading, the S&P 500 is up 0.1%, while the Nasdaq is flat. Auto-related names remain under pressure, with Ford down 4%, GM off about 7%, and Tesla trading modestly lower (- 0.2%). St. Louis Fed President Musalem warned that Trump’s tariff escalation could delay rate cuts, echoing recent cautious remarks from other Fed officials. Attention turns to Friday’s PCE inflation report — the Fed’s preferred price gauge — as markets also digest Trump’s statement that reciprocal tariffs would remain in place throughout his second term.
► Asia-Pacific markets ended mixed, as regional investors reacted to the latest U.S. trade actions and local data. Japan’s Nikkei 225 fell 0.71%, snapping a two-day rally amid steep declines in auto shares. China’s mainland indices posted modest gains, with the Shanghai Composite up 0.15% and the Shenzhen Component adding 0.23%, led by metals and tech. Hong Kong’s Hang Seng Index rose 0.45%, extending its rebound and showing that Trump's tariffs lead to an outperformance of Chinese stocks. Australia’s ASX 200 declined 0.38%, ending a five-day winning streak, as softer CPI data and next week’s RBA meeting weighed on sentiment.
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